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...Grosvenor, the Duke of Westminster’s property company, is launching a £900mn lending business focused on residential development, as real estate investors opt for debt investments over the risk of buying...
...The loans were tied to its residential portfolio and development pipeline....
...Mortgage lending to older UK borrowers slumped in the last three months of 2023, as higher interest rates led to an affordability squeeze for over-55s....
...By comparison, loan loss provisions dropped at Citi, JPMorgan and Wells Fargo, by 33 per cent, 32 per cent and 29 per cent, respectively, from their previous quarters....
...The business would expand Citi’s business in China, which already includes corporate lending and other banking services....
...Daniel O’Donnell, global head of alternative investments at Citi Global Wealth in Boston, emphasises the advantages....
...“Lending demand has not rebounded at the level they had hoped,” said Hertrich....
...Citi said the rise in profits was mainly due to the higher revenues, partly offset by higher expenses and higher cost of credit....
...JPMorgan, Citi and Wells will report earnings on April 12. Goldman Sachs publishes results on April 15 while Morgan Stanley and BofA will do the same the following day....
...So credit is more likely to tighten within other parts of commercial property markets, and not corporate lending, residential mortgage lending or consumer lending: Larger banks could face some turbulence...
...The likes of Citi, Barclays and Deutsche Bank are following in the footsteps of lending-to-companies-trailblazer JPMorgan, which earlier this year set aside a huge pile of greenbacks for this innovative...
...Revenues from corporate lending dropped 26 per cent, however, as higher interest rates dented demand for borrowing. A drop in market volatility at the end of the year also hurt the bank’s traders....
...Although the index for demand for mortgage lending in the fourth quarter was still negative at minus 31.6 per cent, it was up sharply from the minus 54.9 per cent reported in the previous three months....
...Regulation Authority could have concerns about banks’ exposure to 99 per cent loan-to-value mortgages, even if partially underwritten by government, and could look for additional capital buffers to support lending...
...Lenders have taken a hit to margins as they lowered lending rates, including reductions on outstanding mortgage rates....
...All five of Citi’s core businesses — corporate lending; credit cards and US consumer banking; transaction services; buying and selling stocks and bonds; and private banking — posted rising sales....
...Citi was also a leader on a $310mn loan to Sunbit, a buy-now, pay-later company that specialises in auto repair shops and dentist offices....
...Citi and Wells Fargo also recorded drops in lending. The pullback in lending hit JPMorgan Chase particularly hard....
...Preston said losses in Grosvenor’s international business, particularly on residential developments in San Francisco, had hit the bottom line....
...The banks signalled on Friday that earnings from lending would now start to fall....
...But the overall market remains tiny: consultancy Baringa reckons that green mortgages amount to £8.1bn or 0.4 per cent of total lending....
...find other ways to reduce their weight in real estate”, he added, whether by syndicating the debt, doing risk transfer deals — where other investors agree to take on the risk of losses — or ceasing new lending...
...Slowing growth in lending risks curbing a key driver of profits for the big US banks when they begin reporting third-quarter earnings this week....
...On Monday, the People’s Bank of China held its key medium-term lending rate at 2.5 per cent....
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